A growing number of merchants are revolting against the credit- and debit-card providers their customers rely on to pay them.

“We are under pressure to be as efficient as we can be to keep our prices down,” said Bill Cook, owner of Howard Lorton Galleries in Denver. “The credit-card industry doesn’t appear that way. They appear to have a cartel.”

At the center of the debate are swipe fees, what banks charge one another to handle and process electronic payments. On a $100 purchase, a merchant might get $98 back, with $2 going to the bank that issued the customer’s card.

The biggest share held back, $1.60 in the above example, is the interchange fee, which goes to cover things such as nonpayment, reward programs and other marketing efforts that promote the use of cards.

Visa and Mastercard, whose cards account for about 80 percent of credit and debit transactions, set that interchange rate on behalf of the thousands of banks.

But interchange fees in the U.S. are several times higher than the regulated rates seen in Europe, Australia and Brazil, critics argue.

As a tough economy forces merchants to negotiate lower costs with suppliers and lower wages with workers, they find themselves powerless to get swipe fees, one of their biggest cost items, lowered.

“As an industry, we have made about $5 billion in profit last year; we paid $8 billion in credit card fees. Our credit fees are higher than our net profits,” said Richard Oneslager, past chairman of the National Association of Convenience Stores.

Despite wide consumer acceptance of cards and increasing volumes of payments made with them, swipe fees have remained high.

That would point to a controlled market, rather than a free one, Oneslager and other merchants argue.

Although merchants don’t necessarily want the government to set rates, they are asking Congress to exempt them from anti trust rules to negotiate as a block and to give them greater freedom to favor lower-cost payment methods, he said.

The banks and payment networks such as Visa and Mastercard are mounting a tough defense.

“Merchants don’t want to pay for their share of this system that brings them more profits and more sales and reduces cost,” said Trish Wexler, spokesperson for the Electronic Payments Coalition.

Electronic payments not only reduce the costs associated with handling cash, but they boost the overall sales volume. If merchants offered their own store credit, their losses would likely far exceed 1.6 percent of sales.

Surveys show that consumers oppose any kind of surcharges for using credit or debit cards. And when interchange fees were cut in Australia, merchants, not customers, pocketed the savings, Wexler said.

“They want their customers to pay. Someone has to pay for this. If it is not the merchant, it is their customers,” Wexler said.

The tough economy has brought the issue front and center.

Franchisees of 7-Eleven gathered 1.7 million signatures protesting swipe fees, far more than they anticipated.

Sandip Mali, whose three stores in the metro area gathered the most signatures in Colorado, said he would start by explaining to customers that lower swipe fees would mean lower costs for them.

“We didn’t have to get into that. We told them we are trying to fight the credit-card companies,” he said. “It was really an easy sell.”

The fees that banks charge one another to handle and process electronic payments are called swipe fees. For example, on a $100 purchase, a merchant might get $98 back, with $2 going to the bank that issued the customer’s card. The biggest share held back, $1.60 in this example, is the interchange fee, which covers things such as nonpayment, reward programs and other marketing efforts to promote card use. Interchange rates in the U.S. are several times higher than regulated rates seen in Europe, Australia and Brazil.

I have worked at The Post since late 2000. My beats include residential real estate, economic development and the Colorado economy. Other publications where I have worked include Financial Times Energy, The Denver Business Journal and Arab News. My parents immigrated from northern Italy, although my great grandparents came to Central City in the late 1800s.

More in Business

Ford Motor Co. is going ahead with plans to move small-car production from the U.S. to Mexico despite President-elect Donald Trump’s recent threats to impose tariffs on companies that move work abroad.

Donald Trump’s administration, already seen as the wealthiest in modern history, is about to get even richer when Goldman Sachs Group Inc.’s Gary Cohn is named the president-elect’s chief economic policy adviser.

U.S. stocks rose for the sixth day in a row Friday as major indexes continued to set records. The biggest gains went to companies that have been mostly left out of the post-election rally, including health care companies and makers of household goods.